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#SubDCCP, #SubEnvironment Receive Update on CAFE and GHG Standards


Date: Dec. 12, 2017
Location: Washington, DC

The Subcommittee on Digital Commerce and Consumer Protection, chaired by Rep. Bob Latta (R-OH), and the Subcommittee on Environment, chaired by Rep. John Shimkus (R-IL), teamed up for a joint hearing on the Corporate Average Fuel Economy Program (CAFE) and greenhouse gas (GHG) standards set for motor vehicles and their impact on innovation, jobs, and consumer choices.

Chairman Latta kicked things off by discussing the conflicting CAFE and GHG standards under the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA), "A hallmark of the American automotive industry has been the ability to innovate and build cars that American drivers want to buy. But outdated, conflicting or impossible-to-meet government regulations get in the way of this type of innovation. It is a rare event, to say the least, for policymakers in Washington to have better ideas about how to meet consumer demand than consumer themselves. All too often Washington stands in the way, particularly when it creates unnecessary confusion with conflicting rules."

In his opening remarks, Chairman Shimkus noted, "EPA estimated total costs in excess of $200 billion dollars by 2025, much of which will show up in the form of higher sticker prices for new vehicles. And although the agency claims offsetting consumer savings from lower fuel costs, we now know that this was based on inaccurate projections of rising gas prices as well as other assumptions that are proving to be off the mark. It is time to review these rules to see if they are a good deal for consumers and whether they can be improved upon."

Energy and Commerce Committee Chairman Greg Walden (R-OR) identified the challenges related to coordinated NHTSA and EPA efforts, "We've seen activity that completely undermines the National Program and works against the Obama Administration's promise of coordinated regulatory efforts. Under the Midterm Evaluation schedule, NHTSA and EPA were to jointly issue their respective determinations on the model year 2022-2025 standards. This was supposed to happen in April of 2018. However, EPA abandoned this commitment and rushed through its final determination -- without coordinating with NHTSA -- just seven days before President Trump was sworn into office."

Mr. Mitchell Bainwol, President and CEO, Alliance of Automobile Manufacturers, in his prepared testimony, voiced the alliance's support for efforts to streamline the One National Program (ONP), "Automakers remain committed more than ever to deploying ever-efficient vehicles on U.S. roads to maximize our energy security and environmental objectives. It is not a matter of if we will meet the aspirational goals set by the previous Administration in 2012, but rather, it is simply a matter of when." He continued, "A harmonized One National Program will deliver on the unfulfilled commitment made by the previous Administration and will benefit both the industry and consumers, while ensuring the program remains a success."

Mr. John Bozzella, President and CEO, Global Automakers, discussed the benefits of a harmonized ONP, "Unfortunately, the current scheme creates friction and drag in the system that slows innovation and results in unnecessary additional compliance costs ultimately borne by consumers with no additional environmental or energy benefits. In fact, the current standards result in a scenario in which a manufacturer could comply with one standard, but not the other. A truly harmonized program should not allow for such anomalies. A lack of harmonization results in a less efficient compliance pathway for improving fuel economy and reducing GHG emissions."

Mr. Forrest McConnell III, President, McConnell Honda & Acura, brought up the importance of consumer choice, "Customers, as you in life, they make decisions. Times change, you have different stages, different desires. Congress got it right the first time by not having a patchwork. You want to consider affordability to customers, and their consumer choice. They get the car that fits their needs. This is the customer's money. A regulator can demand a certain car gets built, but a customer has the right to spend his money on what fits him."